I noticed that every single video or screenshot posted of these games are using hardware rendering. I was wondering if the shadows display properly in software rendering because noone has ever posted a video or screen of these games using software rendering(which is what I prefer and play with).

Well, my friend, try running it on a core i7 extreme at 4.5ghz with 5 cores dedicated to software rendering, see if it's still slow then =)
What about Valkyrie Profile 2, does shadow work in software mode rendering?
Rama, can you show me a pic of what you mean by "slightly" wrong?